No new or unique ground here. A given folk song and folk music in general are two subjects, not one or the same. OP needs to answer at least three questions: who is using the label; the target audience and what are they labeling?

According to the principle of the Five Ws, a report can only be considered complete if it answers these questions starting with an interrogative word:
Who
What
When
Where
Why

It's relatively easier to define or get consensus on a folk song. A folk song CD or set list is just that much more difficult. A club, label or artist will step on somebody's toe, at some point… c'est la vie, c'est la guerre, c'est la populaire...